Starbucks is embracing a tough cost-cutting method that's led workers elsewhere to bring their own coffee to work

Core Viewpoint - Starbucks is implementing zero-based budgeting (ZBB) as part of its turnaround strategy to identify savings while increasing spending on its "Back to Starbucks" plan, which includes hiring more baristas [1][2]. Group 1: Zero-Based Budgeting Implementation - The zero-based budgeting method requires managers to justify all expenditures each year rather than basing them on previous spending [1]. - CEO Brian Niccol emphasized the importance of ZBB in exploring growth opportunities and identifying potential cost offsets during the company's earnings call [2]. - CFO Cathy Smith, who recently joined Starbucks, expressed her support for using ZBB to uncover stranded costs [2]. Group 2: Historical Context and Adoption - ZBB gained traction in the 1970s, notably advocated by former President Jimmy Carter, although it was not widely adopted by the federal government [3]. - Major brands, including AB InBev and Kraft Heinz, have successfully implemented ZBB to reduce costs and improve margins [3][4]. - The strategy has faced criticism for being overly stringent, potentially hindering employee productivity and innovation, as seen in the experiences of former Kraft Heinz employees [4][5]. Group 3: Other Companies Using ZBB - Companies like X (formerly Twitter) and General Motors have also adopted ZBB during critical transitions, such as after Elon Musk's acquisition and in response to pandemic-related disruptions, respectively [6].